February 18, 2010
Philippines buys 515,700 tonnes of feed wheat on El Nino threat
The Philippines has bought 515,700 tonnes of imported feed wheat on concerns that local corn will become more expensive as El Niño limits crop production.
Citing industry data, the volume was contracted from late 2009 to early 2010 at an average price of US$210 a tonne, including freight.
The grains will come from Brazil and the Black Sea region, which includes Ukraine and Russia.
The source said the imported feed wheat would have a landed cost of almost PHP12 (US$0.25) a kilo, including an import tariff of 7 percent and local transport cost.
Another source said that feed millers and integrators were "positioning" to secure raw materials for animal feeds because a corn shortage was "imminent."
A source said "more feed wheat could come in if a shortage of local corn develops in coming months."
Tennyson Chen, president of Bounty Group of Companies, which consolidates feed wheat imports, among others, would "neither confirm nor deny" the current volume of feed wheat imports.
Chen would only say there was "some concern" about corn supply among feed millers, making further imports possible. Yet, he said, the impact of El Niño on corn supply was not yet being felt.
Roger Navarro, president of the Philippine Maize Federation, said in a text message that the corn sector was aware there may be 500,000 tonnes or more in feed wheat imports coming in.
Navarro said corn prices have not surged yet, but admitted it was possible that corn prices could go up in coming months as dry spells in corn producing areas limit crop production.
However, Navarro said it was more likely that corn prices would reach only PHP13 (US$0.28) per kilo and not PHP20 (US$0.43) per kilo as in early 2009.
